Section 6 – Businesses
Credit for Reporting Tips – Quebec
An employer who operates an establishment covered by the measures relating to employee tips must file an annual report of tips for each employee, no later than the last day of February of the following year. Employers are entitled to a refundable tax credit equal to 75% of employer contributions to the extent they cover the tips received directly by an employee as well as those attributed by the employer under an attribution mechanism. Indemnities paid on general statutory holidays or for family, parental or health6 leave under the Act Respecting Labour Standards are eligible for the credit.
6 Eligibility for the new alloance provided in the Act respecting labour standards since January 1, 2019.
Scientific Research and Experimental Development
For federal and Quebec purposes7, individuals who carry out SR&ED work are entitled to a tax credit. In Quebec, the first $50,0008 in annual expenses does not give entitlement to the credit. To learn more about the rates, see Table C5 in the Corporate Taxation and U.S. Federal Tax Schedule.
7 In Ontario and New Brunswick, the credits are only offered to corporations. 8 Excluded expenses threshold applicable to a taxpayer whose total assets amount to less than $50M (amount increased gradually up to $225,000 when the assets reach $75M).
Apprenticeship and Training Credits
Apprenticeship Job Creation Credit – Federal
Employers may claim a non-refundable tax credit equal to 10% of salaries and wages paid in respect of apprentices who carry on a trade included in the Red Seal trades.9 The maximum annual credit is $2,000 per apprentice. Unused credits can be carried back three years and forward twenty years.
9 Source: http://www.red-seal.ca/w.2lc.4m.2-eng.html.
Credit for On-the-Job Training – Quebec
A taxpayer who engages a trainee or apprentice for eligible training is entitled to a refundable tax credit. Eligible expenses for this credit include the trainees’ or apprentices’ salaries as well as those of their supervisors. The eligibility conditions vary depending on the training provided.
The tax credit (for unincorporated taxpayers) is 12% of the eligible expenses and the weekly maximum for such expenses is $700 or $875 depending on the type of training. The maximum number of hours of training supervision varies from 10 to 20 hours per week.
The tax credit is increased to 16% and the maximums to $875 and $1,225 in respect of expenditures incurred to hire certain immigrant, handicapped or Aboriginal trainees or for internships in an eligible resource region. In addition, the number of supervisory hours is doubled.
When the following conditions are met, the 12% and 16% credit rates are increased to 20% and 25%, respectively:
- The trainee is a student trainee;
- It is at least the third consecutive taxation year for which the taxpayer is entitled to a tax credit for a student trainee;
- The eligible expenditure in respect of a student trainee is at least $2,500 for each of these three years.
Cooperative Education Tax Credit – Ontario
An employer who hires a student registered in a cooperative education program is entitled to a refundable tax credit of 25% to 30% of expenses, up to a maximum credit of $3,000 per apprenticeship (maximum of four apprenticeships for the same student). Expenditures include salaries, wages and payments by the business to a university or college, or a placement agency.
If you hire trainees, consult a tax specialist to ensure you claim all the credits to which you are entitled.
Tax credit for taxi drivers or owners – Québec
An individual who is a resident of Quebec on December 31 of a year may claim a refundable tax credit for taxi drivers or owners, if, as the case may be:
- The individual is the holder of a taxi driver’s permit at any time during the year;
- The individual, or a partnership of which he/she is a member, is the owner of at least one taxi owner’s permit on December 31 of the year and, during the period in question, the individual or partnership assumed 90% or more of the fuel costs for the taxi covered by this permit.
In 2019, this credit is the lesser of $584 and 2% of the gross income from employment or a business from the use of the taxi permit.
This document is up to date as of August 1, 2019 and reflects the status of legislation, including proposed amendments at this date.